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What is an Executor or Administrator and What do They Do?
If a person dies with a will, the will usually appoints an Executor. (Older wills use the Latin word executrix for a female executor; modern wills use executor as a unisex word.) An executor who is out of state does not need a Nevada co-executor, although if requested one could be appointed.
(Surprisingly, most California counties discriminate against an out of state Executor.)
If a person dies without a will, a relative can be appointed Administrator. (Again, you may see a female Administrator referred to as an Administratrix.) N.R.S. 139.040 specifies which relatives have priority to be appointed administrator. If the administrator is out of state, a Nevada co-administrator must be appointed. Nv. Res. or Prof. Administrator
Executors and Administrators are collectively called Personal Representatives. There is little difference between an Executor and Administrator except that an Administrator not resident in Nevada is required to work with a Nevada resident co-Administrator. There is no similar requirement for a non-resident Executor. Also, the Executor is usually appointed to serve without bond which means the Executor can handle the estate's money. An Administrator needs a bond, or, to avoid the expense of a bond, the Administrator will be ordered to run all estate money through the attorneys' trust account. Occasionally a Do it Yourself Will appoints an Executor without the magic words that the Executor may serve without bond. In such a case either the Executor has to get a bond or run the estate's money through the attorney's trust account.
The duties of the Personal Representative depends on what sort of property is in the estate. Here are typical jobs of the Personal Representative:
- Hire an attorney for the estate and negotiate the attorney fee. There is no obligation to hire the attorney who wrote the will.
- With the advice of the estate attorney make decisions on whether to take certain legal positions. For example, a creditor might have a claim that maybe is valid and maybe isn't. Does the estate deny it or pay it? Or, perhaps, the will is truly ambiguous as to whether A or B gets an asset; the personal representative will decide which position the attorney should argue to the court, or the personal representative may try and broker a compromise among all involved.
- Go through the Decedent's residence(s) and storage facility, if there is one, and examine the contents. Perhaps, the contents are only junk with no value that makes them worth the trouble to sell or worth the time of a charity to pick them up. Or, the contents could be very valuable in which case the personal representative will determine the best way to sell them. Or, perhaps, the contents have some value but not enough to justify the cost of trying to sell them in which case it may be appropriate to give them to charity. (It could be appropriate to give high value items to charity, but only if the will specifies, or the heirs and court agree.)
- If the decedent owned a motor vehicle or real estate, make arrangements to sell these assets with the guidance of the estate attorney, and often, the approval of the Court. Selling a car could involve a quick sale to a wholesale dealer or advertising the car to retail buyers, depending on circumstances.
- If the decedent had financial accounts such as bank accounts, stock accounts, or mutual funds, determine what paperwork these institutions need to turn over money to the estate and do the paperwork, with the guidance, as needed, of the estate attorney.
- If necessary hire a tax professional to do both a decedent's tax return and the estate's tax return. As an attorney I can make recommendations, but the personal representative is free to shop around, or use their personal tax person.
- If there are heirs who are not personal representatives, it will be the job of the personal representative to communicate the status of the estate to the other heirs. The attorney hired to do the probate is not expected to talk to non-clients and an heir is not a client unless the heir is a personal representative who hired the lawyer. (If the attorney is charging by the hour and the personal representative authorizes to the attorney to talk to all of the other heirs the lawyer may do so, but the heirs may not be pleased with the resulting hourly bill.)
Fees for the Personal Representative:
The personal representative is entitled to a fee of 4% of the first $15,000 in value of the estate, 3% of the next $85,000 and 2% of any amount over that. N.R.S. 150.020. For estate over $100,000, this comes out to $3150 + 2% of the amount over $100,000. This fee is taxable income, whereas usually the inheritance is not. If the personal representative is working for themselves or themselves and close family members, the personal representative often declines the fee. Suppose, for example Sister is the personal representative of a estate of which Sister and Brother are the only two beneficiaries. Suppose Sister doesn't feel very kindly toward Brother. Should Sister take a fee as personal representative? Suppose she is entitled to take a fee of $4,000. But suppose she would have to pay income tax on the fee and self-employment social security taxes on the fee. Suppose both of these taxes combined were 40%. So, by taking this fee, before taxes, she gets an extra $2,000. (Her share of the inheritance and her brother's would each be reduced by $2,000 to pay her the $4,000 fee.). But after she pays 40% taxes on $4,000, she is only ahead $400 by taking the fee. So in this example, by taking a $4,000 fee she costs her brother $2,000 and only comes out ahead $400, because the I.R.S. gets the other $1,600.
If the personal representative is an out of state Administrator, then a Nevada co-administrator must be appointed. (But if the personal representative is an out of state Executor there is no need for a Nevada co-Executor.) The probate court will not allow the same law firm to take both an administrator's fee and an attorney's fee. Some probate lawyers suggest a friend or another lawyer if it is a big estate (who will hopefully soon return the favor) to act as Nevada co-administrator. Typically, the Nevada co-Administrator is paid 1/2 of the statutory fee of the personal representative. At Reed & Mansfield we don't see why you should pay a stranger we recommend that much money unless the Nevada co-Adminstrator would really deserve that fee because the in state co-administrator actually does a lot of hands on work. If you need a Nevada co-Administrator and don't have a friend in Nevada you can use, we can both find you a Nevada co-Adminstrator and negotiate a reasonable fee for the Nevada co-Administrator based on what time is actually expected of the person, not based on a percentage of the estate. In our experience, most out of state administrators and executors want to come to Nevada as necessary and use their energy to see that the estate assets are sold for as much as possible as soon as possible. Thus, usually the role of the Nevada co-Administrator is rather minimal. However, if the out of state co-Administrator does not want to come to Nevada to take care of things such as selling property in Nevada, then the role of the Nevada co-Administrator can be quite time-consuming. Nv. Res. or Prof. Administrator
A relative with the highest entitlement to be Administrator can nominate a replacement administrator, usually someone from the family with the time and energy to see the job done. N.R.S. 139.050 provides for this. Likewise, under N.R.S. 138.045 a person named as an executor can appoint a qualified co-executor or substitute. All personal representatives must be approved by the court and meet certain qualifications.
Clark County Public Administrator, Other Professional Administrators, and Non-Professional Administrators:
Typically there are four situations where a relative does not serve as the personal representative.
- First, if no relative is found by the coroner's office investigating the death, the Public Administrator will probate the estate if necessary. If the Public Administrator cannot find a relative and there is money in the estate, it will escheat to the State of Nevada. See Mom Dies, Nevada Inherits
- Second, as mentioned above, if there is no will or there is no a will and no executor named in the will is willing to serve, an administrator must be appointed. If the administrator resides out of state, a Nevada resident co-administrator must be appointed.
- Third, it sometimes happens that the executor or potential administrator is not up to doing the work to close the estate. This could be because the person is out of state or out of the city and very busy with work, or has a disability.
- Fourth, the potential executor or administrator may find it personally distasteful to deal with creditor claims, especially if they are claims of other relatives.
If the situation is that a non-Nevada resident is up to doing all the work of administration but simply needs a Nevada resident co-administrator only to meet legal requirements, there are a number of possible solutions. Perhaps, the administrator has a friend in Nevada who will serve. Or, often the estate lawyer suggests a Nevada resident co-administrator. The lawyer is free to suggest that the Nevada resident co-administrator share the administrator's fee 50-50 and this is often the case if the Nevada resident co-administrator is someone the lawyer wants to do a favor for. Or, as we have been recently doing in cases where the Nevada resident co-administrator will just be signing documents, we can find a Nevada resident co-administrator who will take a much smaller cut of the administrator's fee. For example, in a million dollar probate the out of state co-adminstrator heir did all the work and a lady in the office building I work in (not my employee) agreed to be the Nevada resident co-administrator for a fee of $1,000. (The statutory administrator's fee for a $1,000,000 probate is $21,500 and 50% of that would be $10,750 so we were able to save the estate quite a bit of money.)
But, if the Nevada resident co-administrator must do more than sign papers to collect financial assets, for example, if the personal property of the estate must be sold because it has real value, or if the administrator will be involved in disputes with creditors or other relatives, and if the non-Nevada resident co-administrator will not be able to devote as much time as necessary to handling these matters, it makes sense, in our view, to hire a professional administrator who knows how to conduct estate sales, and who won't feel overwhelmed if court battles develop. The Clark County Public Administrator has discretion, if asked to serve as administrator, to agree to serve or not and will usually hire the lawyer who referred the case to him to be estate lawyer. In addition, there are other private professional administrators available for hire and appointment. In summary, we can help you find a Nevada resident co-admininstrator or a single administrator to carry the whole burden regardless of whether the estate is contested or not and regardless of how much work is involved. If a Nevada resident co-administrator is needed for an uncontested estate in which the out of state administrator who is an heir will basically do all the work, we can find you a Nevada resident co-administrator for $500 for each half million or fraction of half million dollars in the estate. If you want to hire the public administrator or private professional administrator talk to us first if you want to take advantage of our discount rates because if you hire the administrator first, the administrator will pick the lawyer and the fee. (However, if it is not crystal clear how the estate should be distributed, the Public Administrator will want to hire his own lawyer, not one who come selected by a particular party.)
We have been impressed with the competence and diligence of the Clark County Public Administrator's office. All other things being equal, for a Clark County probate, the Public Administrator would be our first recommendation for a hands on administrator.
Advantages of Being the Personal Representative:
Finally, it should be pointed out that if the estate involves a dispute with other claimants to the estate, and you have the right to be the personal representative (adminstrator or executor), there is a big advantage to you serving as personal representative. The personal representative's legal fees are almost always paid out of the estate and for that reason the personal representative can usually hire a lawyer on the estate's credit without using their own funds. But someone else claiming under the estate, for example, an heir who is not the personal representative, has no assurance that the estate will pay their legal fees and their lawyer will want to get paid up front or as the case proceeds, unless they find the minority of probate attorneys who take disputed cases on a contingency fee.
In the last paragraph we said that the personal representative's legal fees are "almost always" paid out of the estate. The obvious exception would be a personal representative who takes a position that the judge believes is clearly unreasonable and without legal merit. In the more typical case in which there is a dispute between the personal representative and another heir, the personal representative's legal fees are paid out of the estate and other heir's legal fees are usually not paid out of the estate.
Naming of Executors in Holographic Will:
A holographic will is a will that is entirely in the hand of the will writer and signed and dated by the writer. Typically such a will is very short. It could be, "I John Doe give everything upon my death to Mary Wonderful. John Doe, 1/1/09." N.R.S. 138.040 provides that if it appears from the will that the writer of the will intended to have a particular person administer the will, the person can be appointed as Executor even though not named in the will. In the example in this paragraph since Mary Wonderful is being given everything it is logical that the will writer would have trusted Mary Wonderful to administer the estate and in my experience the Courts will appoint Mary Wonderful to serve as Executor if she so requests.
If a Defendant in a Personal Injury Case Dies:
This special situation, involving a special administrator, is discussed at the bottom of the Probate page of this website.